ImExHS Limited (IME) Earnings Call Transcript & Summary

Good morning, and thank you for joining us. Today, we are presenting our full year results for FY '25, the 12 months ended 31 December 2025. What you will hear this morning is a story of execution, not a story of transformation yet to come, but of a business that made commitments to its shareholders and delivered on them. Revenue grew 10% to $29 million. Underlying EBITDA grew more than threefold to $1.6 million at the top end of guidance. ARR now stands at $34.8 million, up 16% year-on-year. And we closed the year with more cash, less debt and a stronger operating foundation than when we started. This presentation will take you through our operational performance, our financial results by division, the investments we have made in Aquila+ platform and our outlook and priorities for FY '26. I will be joined by our CFO, Reena Minhas for the financial sections. Let's get into it. Before we get into the numbers, I want to ground everyone in what IMEXHS actually is. We are one company with 2 distinct but deeply connected businesses, united by a single mission, democratizing access to medical imaging expertise across underserved markets. The software business built on a Aquila+ platform, delivers RIS-PACS' universal and AI capabilities to hospitals, diagnostic centers and imaging networks. It is a cloud-native recurring revenue software business operating across 18 countries. The radiology services business operated through RIMAB provides outsourced diagnostic radiology services across 38 diagnostic centers, primarily in Colombia, but with teleradiology reach into Spain. These businesses reinforce each other. RIMAB runs on Aquila. Every workflow improvement we build into the software gets stress tested in our own operations before it reaches our clients. That is a competitive advantage, most pure-play software companies don't have. On Slide 3, last year was operationally strong. At 31 December 2025, we had 564 installed sites, up from 525 at the start of the year. That is 39 net new deployments in 12 months. And crucially, the growth has been sequential, 8 consecutive quarters of installations growth from 511 in Q1 FY '24 to 564 today. During the year, we processed 8.3 million studies. Each one of those studies represents a patient, someone waiting for a result that affects their care. Scale matters here. We now have 3.6 million registered patient portal users who generated 8.2 million portal sessions during the year. That is an average of 2.3 sessions per user, a metric that tells you these are not passive registrations. Patients are returning. They are engaging with their results, their images, their protocols. That depth of use builds the case for the portal as a core part of the clinical workflow, not a simple value add. And we have introduced a formal NPS program for the first time, closing the year with a score of 42.7. For context, the global B2B software benchmark sits around 30 to 40. On Slide 4, at the start of FY '25, we said we expected a strong revenue growth and positive underlying EBITDA with more of the improvement weighted to the second half. At the half year, we tightened that guidance, revenue in the range of $27.5 million to $28.2 million and underlying EBITDA of $1.3 million to $1.6 million. We delivered revenue of $29 million ahead of that range. We delivered underlying EBITDA of $1.6 million at the top end. We are not there yet with every metric, but on the numbers that count revenue and EBITDA, we did what we said we would do. The second half momentum is also important context. H2 underlying EBITDA of $1.3 million versus $0.3 million in H1 is not a coincidence. It reflects the compounding benefit of the operational changes we made through the year, high-quality contracts, tighter cost control and improved collections. We go into FY '26 with positive operational momentum on both the top and the bottom line. On Slide 5, now let me take you through the key numbers. Revenue of $29 million, up 10% year-on-year. On a constant currency basis, which strips out the impact of the Colombian peso and other regional exchange rates against the Australian dollar, that growth was 6%. The underlying business grew in both reported and local currency terms. ARR of $34.8 million, up 16% year-on-year and 7% on a constant currency basis. ARR is the metric we manage most closely because it represents contracted recurring forward revenue. The gap between ARR and reported revenue reflects the growth opportunity still in front of us as ARR converts into wins. Underlying EBITDA of $1.6 million, up from $0.5 million in the prior year. Underlying EBITDA excludes FX impacts, share-based payments and the one-off goodwill impairment of $1.7 million taken in the first half. On the balance sheet, cash of $3.3 million at 31 December, up from $2.1 million at the start of the year. Debt of $0.5 million, down from $1.2 million 12 months prior. Net debt is effectively negligible. Turning to Slide 6. Now the 2 businesses in more detail. Software delivered revenue of $10 million, up 12% on the prior year, and ARR of $11.8 million, up 19%. Underlying EBITDA of $3.8 million, representing a 39% EBITDA margin, up from 36% on the prior year. As Aquila+ deployments scale, the marginal cost to serve falls and those economics become very attractive. The numbers include investment in senior commercial leadership, our VP of Global Sales and the broader go-to-market infrastructure we are building to drive software growth. Radiology Services delivered revenue of $19 million, up 8% and ARR of $23 million, up 14%. Underlying EBITDA of $1.3 million, representing a 7% of the revenues is a significant result. 12 months ago, RIMAB was at breakeven. Through disciplined repricing, cost reduction and early-stage automation, we have returned that business to profitability. It is now a cash contributor to the group. Corporate costs of $2.7 million, flat from the prior year. The consolidated result, $ 29 million revenue, $1.6 million underlying EBITDA. That is the shape of the business, 2 operating divisions with very different economics, both improving and a corporate function that is investing in future growth. On Slide 7, ARR is the lens through which we see the future. Total ARR of $34.8 million at 31 December 2025 is up 16% versus $30 million at December 2024. On a constant currency basis, that is holding exchange rates constant to remove Colombian peso and Mexican peso movements, the growth was 7%. Both measures reflect a business with growing sticky contracted revenue. The software ARR of $11.8 million is up 19% year-on-year from $9.9 million. This growth is coming from a mix of new enterprise deployments, module expansion within the existing base and renewals at higher contract values. Total renewals, for example, contributed $348,000 of new ARR, demonstrating the value expansion possible within our existing enterprise accounts. Radiology ARR of $23 million is up 14% from $20.1 million. And the Oncolife contract in Colombia is the standout here, contracted at an expected $1.4 million of ARR. It has grown to $2.1 million in actual billings. On Slide 8, 2025 was a financial turning point for our business. On the left side of this slide, you can see the specific actions we took during the year. We tightened credit terms. We moved aggressively on collections discipline, focusing our energy on clients who pay on time and exiting relationships where we're absorbing the cost of a slow payment. We implemented AI orchestrated call center workflows in RIMAB that significantly reduced service delivery costs. We optimized cloud and storage architecture. We automated across admin and help desk functions. And in radiology, we made the deliberate decision to exit subscale contracts where the margin and credit dynamics didn't justify the operational overhead. On the right side, you can see what that delivered. Revenue up 10%, H2 EBITDA of $1.3 million, 4x the H1 rate, cash up from $2.1 million to $3.3 million, debt down from $1.2 million to $0.5 million. These outcomes reflect the cumulative impact of operational decisions made with discipline over 12 months. On Slide 9, let me shift now from what we delivered to where our focus is right now, the work in progress that will determine our 2026 outcome. This section covers our 2 commercial priorities. scaling the Aquila+ software business and continuing to expand radiology services margin through discipline and automation. On Slide 10, the Aquila+ platform is ready to scale. The product is live and including new agents for the most important points of the workflow. It is running in production across teleradiology environments, hospital groups and multi-specialty clinics. We have 99.9% uptime, click tenant activation in under 5 minutes. When a new customer signs a contract, we can have them operational in the same day. That is a deployment speed that our competitors, most of whom still require on site infrastructure simply cannot match. On the commercial side, we have strengthened the partner channel significantly. We now have 27 active partners across 12 countries. These partners are not passive resellers. They are embedded into their local markets running their own sales motions. The proof points are real. We regained OMNI Hospital in Ecuador, a client we had previously lost to a competitor through the Mobilemed partnership delivering 86,000 of new ARR. We renew and upgrade Grupo Sao Paulo in Peru through KLD, delivering 88,000 of NRA. And Fab in Colombia renewed for 36 months at $162,000 of ARR. On Slide 11. Now let me explain why Aquila+ matters. At its core, Aquila+ is an agentic AI platform. That means the system is not just providing tools for human uses, it is completing parts of the clinical and administrative workflow autonomously. The most tangible example, we have reduced call center cost by 80% through AI orchestrated scheduling workflows. That is not a project. It is delivered running in our own operations today at RIMAB. For radiologists, we have achieved approximately 40% faster worklist processing, fewer clicks per study, embedded voice recognition for report dictation AI agents that assist with reporting, drafting, translation and evidence summarization. For our radiologists managing high volumes of studies under time pressure, these are meaningful productivity improvements. For IT and hospital administrators, the value proposition is different but equally compelling. Multi-tenant cloud architectures means no on-site service, no local IT support required, disaster recovery and long-term archiving built. The marginal cost to serve per new SaaS tenant is approximately 70% lower than a traditional deployment model. As we grow the tenant count, the economics improve. That is the structural advantage of the architecture we have built. ISO 2701 certified, most of our competitors are not in a health care environment where data sovereignty and security are increasingly nonnegotiable procurement criteria, that certification is a meaningful commercial differentiator. Going to Slide 12. on to our margin agenda for the next 12 months. There are 3 levers we are pulling simultaneously, and they are already in motion. The first is pricing and discipline. We have completed a full segmentation review of our software target market, dividing it into 4 distinct customer segments with different value drivers, different cost to serve profiles and different willingness to pay. Here, the expected impact is an increase of 30% to 60% in average contract values for new customers from 2026 onwards. The second lever is automation and unit cost reduction. AI orchestrated workflows are already reducing service delivery costs in RIMAB. We are extending these across cloud and storage optimization, help desk automation and admin processes. The third lever is portfolio mix. In radiology, this means continuing to prioritize high-margin creditworthy contracts with well-funded counterparties and exiting or repricing those that don't meet that bar. In software, it means prioritizing enterprise deployments and higher-margin volumes over volume-based growth at thin margins. The combined impact of these 3 levers is why we expect continued EBITDA improvement in FY '26 and beyond. Slide 13. Working capital was one of our most important FY '25 achievements. The Colombia health care environment creates structural pressures on collections. Government adjacent payers and large hospital groups routinely stretch payments and health care reform added further liquidity stress to the system during the year. We responded systematically, enhanced credit controls at contract origination, proactive collections managed from day 1 rather than waiting for invoices to age, milestone-based invoicing on new contracts and selective exit of relationships where the credit profile didn't justify exposure. The outcomes speak for themselves. Debt down to $0.5 million from $1.2 million, cash up to $3.3 million. Entering FY '26, the Colombia policy backdrop remains fluid, presidential elections in Q2, ongoing health care reform. Our response is already embedded, tighter credit, rephase collections, pricing discipline. We are not waiting for the environment to improve. On Slide 14, a notable win was OMNI Hospital in Ecuador. We had lost this account to a competitor. We won it back $86,000 of new ARR of Mobitelemed. This shows the product has improved to the point where customers choose us over an incumbent. In Peru, Grupo San Pablo renewed and upgraded to 88,000 of new ARR. In Colombia, Fabilu renewed for 36 months at 162,000 of ARR. The Salud total renewals, Clinica Nogales and Centro Policlinico del Olaya are the template for what enterprise expansion looks like at IMEXHS. Cloud migration, new AI modules, voice recognition, a 30% per study rate increase and $348,000 of new ARR in aggregate. On Slide 15, radiology services. 12 months ago, RIMAB was at breakeven. Today is delivering a 7% EBITDA margin with 2 consecutive quarters of positive underlying EBITDA in H2 FY '25 and ARR of $23 million. The strategy is selective growth, larger clients with stronger margins. The Oncolife contract grew from an expected $1.4 million ARR to $2.1 million in actual bids, incorporating IMEXHS enterprise RIS-PACS patient portal and AI layers. The cost program is producing real results. AI orchestrated scheduling and call center workflows have materially reduced cost to serve. We have exited subscale and slow paying contracts. On the large previously disclosed opportunity, the scope has grown since first disclosure. We expect a determination in H1 FY '26. The client remains engaged, no certainty of signing, but it is a live and progressing conversation. Now let me hand over to Reena Minhas, our CFO, for the financials.

Thank you, German. I will now run through the FY '25 financial performance of the company, starting on Slide 17. FY '25 revenue of $29 million was up 10% versus PCP and up 6% on a constant currency basis. FY '25 underlying EBITDA, which excludes share-based payments expenses, foreign exchange movements and the impairment charge in the first half was $1.6 million, up versus $0.5 million in PCP. Pleasingly, the second half FY '25 underlying EBITDA of $1.3 million was up versus $0.3 million in the first half. Moving to Slide 18, the balance sheet. At 31 December, the company had a closing cash balance of $3.3 million, and net assets were up to $15.9 million. Intangible assets of $6.7 million consist of goodwill of $3.3 million for the Radiology business, software assets of $2.4 million and $0.8 million for customer contracts. Receivables were up $3.1 million due to a change in the major customer payment timing during the year and an increase of $1 million in tax receivables due to timing of tax payments and refunds. Debt of $0.5 million at 31 December was down from $1.2 million at the end of last year. Slide 19 summarizes the cash flow. The cash balance of $3.3 million was up versus PCP balance of $2.1 million. Net cash inflows from operating activities was a cash inflow of $0.6 million, up $1.2 million versus a $0.6 million outflow in the prior year. Net cash used in investing activities was $1.2 million with $0.9 million invested in software development and $0.3 million in PP&E. Net cash from financing activities was $1.6 million with $2.4 million raised via a placement during the year to strengthen the company's balance sheet and to support growth. This was partially offset by debt repayments of $0.7 million. I will now hand back to German to take you through the outlook and priorities for the coming year.

Thank you, Reena. Four priorities this year. Software is the primary growth level. The platform is ready. The pipeline is stronger and the partner channel is maturing. 2026 is the year we convert that investment into accelerated ARR. The new segmentation-based pricing model, the refreshed sales leadership and the partner program are the 3 mechanisms. Mexico is showing real traction. Radiology grows selectively where margins are right and counterparties are credit worthy. Margin expansion continues. AI orchestrated workflows, cloud optimization, pricing discipline on renewals. We expect software margin improvement to show through on a 6- to 9-month lag from actions already taken. Working capital remains tight. Colombia's policy backdrop is fluid, elections in Q2, reform discussions ongoing. Our controls are in place, and we are not dependent on macro improvement to deliver the plan. Platform proven, team stronger, execution improving. FY '26 is about converting FY '25 foundations into faster, more profitable growth. Slide 21, guidance statements. We expect to exceed FY '25 underlying EBITDA. We expect to be cash positive for the full year. We expect software revenue to grow faster than in FY '25. And we expect more of the growth in revenue earnings and cash to occur in H2. On the H2 weighting, it is structural, not a hedge. The Latin American procurement cycle has a natural second half as institutional budgets confirm and contracts execute. And our commercial initiatives, new pricing, partner expansion, pipeline conversion take time to move from signed to billing. Contracts won in H1 typically start generating revenue in H2. We will provide more specific guidance ranges at the half year as we did in FY '25. We enter FY '26 with more contracted revenue, a better product and a more efficient operating model than at the start of any prior year. The trajectory is right. We intend to continue. And finally, thank you to our 435 employees, the clinicians, engineers and operations team who process over 8 million studies a year and make sure results reach patients who need them. The work is demanding and consequential. I am proud of this team to our Board and partners for the engagement, discipline and trust that makes this business function. And to our shareholders, we are committed to earning your continued support. We look forward to updating you at the half year. We will now open it up for questions. Do we have any questions?

Yes. I'm just having a look. I'll read out the questions. I may combine any similar questions. And if we are running short of time, we might have to come back to you separately after the call. But there is one here, man. How do you think of capital allocation as cash begins to get generated?

So do you think of capital allocation as cash begins to -- sorry, can you...

I think the Board balances the need for growth and investing in the business versus paying dividends. So I think it's -- the Board is assessing that continually.

Yes. Well, our main focus for the moment is to accelerate growth that requires from us to keep investing, but always protecting the profitability balance for the company. We would like to accelerate the growth of the software business via more investment in marketing essentially and sales activities, but always being very cautious of not breaking the equilibrium, the financial equilibrium of the company. So for the moment and for the current year, this is the priority, growth, protecting profitability.

There's another question. Who are the primary competitors you are facing who has best-in-class software alternatives?

In the region, we are operating is the Latin American region. The main competitors are more or less the same global main players like Carestream, Agfa, [ Fabilu ] and there are some new brands emerging from some markets like Mexico and Argentina. Mainly, we face strong competition at the public tender levels and big private deals against Carestream, the former. We are in a very strong position, and we have significant advantages being, let's say, a local provider with help desk and post-sale services in the same time zone with the possibility to support our customers in the same language as well. But beyond that, our product is more well adapted to the Latin American requirements. That is creating an advantage, and that is not leaving behind the high-end functionalities that we can offer that are at the same level and in some cases, superior to those of those brands that I mentioned before.

Thanks, German. Are there any other further questions? Just give it a few moments before we sign off. I think that's all, German. There's no further questions.

Well, thanks again for making the time this morning for our FY '25 results presentation call. Thank you very much.